“You Get What You Pay For” Is The Wrong Argument For Starbucks

Ad Age is showing a preview of what’s to come from Starbucks and BBDO/New York. Clearly, Starbucks has McDonald’s and Dunkin’ Donuts in their rear view mirror.
“We have more traditional mass marketers coming into the coffee category and trying to commoditize it,” Starbucks Chief Marketing Officer Terry Davenport said. “It’s just taking brewed coffee and lattes down to a commodity level, where price is the only thing that matters.”
It’s funny that Davenport would use the commodity word, since that’s exactly what Starbucks did the neighborhood coffee shop. For that reason, and for the fact that they over-roast their beans, no true fan of coffee is going to willingly shop at Starbucks, or say nice things about the brand.
If I was advising Starbucks’s brand team, I’d tell them to look up, not down. Create a connoisseurs’ roast that’s not burnt and work hard to win fans among the coffee cognescenti. Doing do would generate positive WOM that could impact other customers, the press and Starbucks employees.

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Co-founder and editor of AdPulp. I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. I worked for seven agencies in five states before launching my own practice in 2009. Today, I am head of brand strategy and creative at Bonehook in Portland, Oregon.

Comments

I may be reaching here, but could they also be saying that cheaper coffee is cheaper because they get their beans from ‘sketchy’ distributors, so there’s a human cost involved as well? Maybe they’re trying to highlight that Starbucks works with distributors to build better business practices?
Again, may be giving them more credit than they’re due, but it seems like the campaign as a whole might be trying to paint a picture that’s very different from just a pure cost argument.

I always feel compelled to post on coffee on your blog since i am not a coffee drinker and all the stuff tastes burnt and bitter to me. I know coffee drinkers all want to extol the health benefits; here goes.
since the anticancer agent, Methylpyridinium, comes only to coffee and only in the roasting process, there’s where you can go on the roasting end of things. wasn’t starbucks one the biggest roasters of coffee on the west coast. Well, now they roast in south carolina, too, greenly, too, don’t they? beans count certain things, but roasting does others. So in a health conscious world, you would want to compare your roasts.
signed,
ruling the roost and retellers, as they say in german stories.
kikiriki

For a brand that originally built itself without traditional advertising, you gotta say their traditional advertising is awful. It’s so old school in its tone and strategy. Even the fact that this post drew contextual ads from competitors seems to hammer the outdated feel that Starbucks has created for itself. They need to realize the brand is irrelevant (and unwanted) in a recession. I know so many people who were Starbucks addicts, but suddenly realized the amount of money they were paying and opted to buy fancy European coffeemakers for their offices. It’s not just about going to McDonald’s or Dunkin’ Donuts. It’s about finding affordable alternatives. Being the high-priced brand does not work right now, and you won’t sway consumers with quality rationales, especially when the cheaper alternatives are not perceived as being inferior.

All personal preferences and Starbucks-hating aside, if I’m so clueless that you have to tell me that the average cup of Starbucks has more going for it than the average cup of Dunkin/MdDonalds/Etc, am I really worth the money you’re spending to do so? (Not to mention the damage you’re doing to the value of your brand by sinking to that level.) Starbucks may feel others are commoditizing coffee, but doesn’t the tone of this ad — including the HBO-ripoff tagline that protests way too much — essentially do the same thing by making price the central concern? Welcome to Knee-jerk Brand Management 101. Ugh.

The ad is meaningless and so is the comment from Starbucks. Commodity markets exist when there is a lack of meaningful difference. If Starbucks is upset others are commoditizing their offering, they need to change their offer.

This ad is all wrong for the current situation we are in and Starbucks should be smarter than that. I understand they are trying to differentiate themselves from the competition based on quality and taste rather than cost, but today everything is about low cost!! Basically all they did was draw attention to the fact that their coffee costs more than everyone else.

first it was
location, location, location,
second it was those other three little words
…need is love
thirdly , in times of trouble it came down to:
health, wealth, but stealth do us part
You can quote me on that but not necessarily in order of …
Nancy

As a partner of Starbucks and hearing what customers mumble while in the line, I must give Starbucks a bit of credit. Some customers, though they come in religiously every day for their latte’s, don’t seem to realize that we actually MAKE the drinks, the frappuccinos, the iced tea… not to mention, our iced coffee is actually BREWED fresh! And we are real humans who labor over these beverages, hand-mixing the mocha sauce, and the frappuccino bases. Many of us also take advantage of full health benefits that not all companies are generous enough to offer to anyone working over 20 hrs/week. If you ask me, from an insiders perspective, it’s about time someone called attention to the fact that the drinks are priced that way because real people actually make them fresh and to each customer’s specifications, which is a lot more than dunkin donuts can say.

Might I also add that many people get up in a huff about the price of Starbucks’ coffee, when the price of the actual brewed coffee is not that much more expensive than other brewed coffees out there. It’s when the more complex beverages come into play that the price goes up. Most people forget that an actual human being steams the milk that goes into their lattes, where in other establishments such as McDonalds, the entire beverage comes from the push of a button – Out of the machine and into the cup. And, many Mom and Pop coffee shops have very similar, if not more expensive prices.

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